General Motors warned on Friday that potential tariffs on U.S. auto imports threaten to hit consumers with higher prices.
Continue Reading Below
In a filing with the U.S. Department of Commerce, the company said import tariffs “could lead to a smaller GM” with a reduced footprint at home and abroad, if the tariffs aren’t “tailored” to advance economic and national security objectives.
The largest U.S. automaker added that tariffs risk leading to fewer American jobs, not more, and lower wages.
“At some point, this tariff impact will be felt by customers,” GM said. “Based on historical experience, if cost is passed on to the consumer via higher vehicle prices, demand for new vehicles could be impacted.
“Moreover, it is likely that some of the vehicles that will be hardest hit by tariff-driven price increases—in the thousands of dollars—are often purchased by customers who can least afford to absorb a higher vehicle price point.”
President Donald Trump, who directed his administration to investigate whether auto imports weaken national security, has threatened to slap European car imports with a 20% tariff. The Commerce Department launched the probe under Section 232 of the 1962 Trade Expansion Act, the same provision used to impose steel and aluminum tariffs.
The Commerce Department said it has received approximately 2,500 comments and expects more comments to be submitted before a midnight deadline Friday night.
“The purpose of the comment period and of the public hearing scheduled for [July 19-20] is to make sure that all stakeholders’ views are heard, both pro and con,” Secretary of Commerce Wilbur Ross said in a statement. “That will enable us to make our best informed recommendation to the president.”
Although a tariff on cars would apply to foreign-made cars shipped into the U.S., American automakers have voiced concerns that the EU and other regions could retaliate. Detroit’s “Big Three” and other manufacturers, including BMW and Mercedes-Benz, export vehicles from U.S. factories to overseas markets.
Among the U.S. vehicles that GM builds overseas are the Buick Cascada, which is assembled in Poland, and the German-made Buick Regal.
|GM||GENERAL MOTORS COMPANY||55.87||+1.02||+1.86%|
Toyota also submitted comments to the Commerce Department on Friday, saying import tariffs would “disrupt” U.S.-based production by depriving plants for key parts.
German automakers are said to be urging the Trump administration and the EU to set car tariffs to 0%. The U.S. currently charges a 2.5% tariff on EU cars, while the EU’s tariff on American vehicles is 10%.
EU President Jean-Claude Juncker plans to visit Washington next month to meet with Trump to discuss trade, a spokesperson for Juncker said Friday.